Is It Time for California to Phase Out Nuclear Power?

Italy recently became the fourth nation to pledge to phase out nuclear power since Japan's Fukushima disaster. Italy accomplished this feat by a popular referendum, soon after Germany did the same in its legislature (Bundestag). Switzerland has also agreed to a phase out and Japan itself has agreed to phase out much of its nuclear capacity in favor of renewables and natural gas.

Should California do the same? Could it do the same?

California has effectively banned new nuclear plants in the state since the 1970s due to a law that requires there be an effective federal nuclear waste disposal facility before any new plants are built in California. And despite efforts to create a federal waste facility at Yucca Mountain, Nevada, and elsewhere, the U.S. is still far from completing any such facility.

There has not, however, been any widespread push to phase out California’s existing nuclear plants. We have three, two in California (Diablo Canyon in San Luis Obispo County and San Onofre in San Diego Conty) and one in Arizona (Palo Verde) that serves California. These three plants have about 5,000-MW capacity that provide electricity to California and have never suffered any major accidents.

5,000 MW is a lot of baseload power and would require enormous amounts of new wind, solar and/or natural gas to replace these nuclear power plants.

But if a decision were made to phase out these plants, would they need to be replaced?

No one has yet, to my knowledge, looked at this issue in detail. But the state’s grid operator, the California Independent System Operator (CAISO), has recently completed a detailed analysis for integration requirements to get to 33 percent renewables by 2020, now required by law since Gov. Brown signed SB 2. “Integration” refers generally to new natural gas power plants to provide power when variable renewables like wind power or solar power aren’t available.

CAISO examined four scenarios in its recent 33 percent renewables by 2020 analysis, some focusing on in-state renewables only, others including some out-of-state power, more wind, etc. The good news is that CAISO concluded, under its current set of assumptions, that California will not need new capacity to integrate the 33 percent renewables by 2020. The analysis found that only a small “load following down” capacity would be required, which could be met through curtailment of existing facilities, rather than building any new facilities. Why such a surprising finding? A number of factors are relevant, but the primary ones are: an excess of existing natural gas generation; robust state-wide energy efficiency and demand response programs, and a significant number of new cogeneration facilities coming online.

CAISO also found that the state would have about 14,000 MW of excess power available by 2020, even after meeting the 33 percent renewables mandate. This is over and above the “planning reserve margin” required by state law. The planning reserve margin is 15-17 percent above expected normal demand for each utility and it provides a buffer in cases where demand peaks are far higher than expected — during summer heat waves, for example. Figure 1 shows the key slide (slide 65) from a recent CAISO presentation on its analysis. The key figure is in the last column, third from the bottom (14,144 MW). The full presentation is available here and was affirmed on July 1, 2011, with CAISO’s finalized analysis submitted to the CPUC.

Comparing the 5,000 MW of nuclear power that serves California, it seems that the projected 14,144 MW surplus by 2020 may allow the phase out of these plants in the coming years without harming the ability of our grid to function reliably.

It is important, however, to recognize that this CAISO report did not explicitly examine a “nuclear phase out” scenario. It would, thus, be irresponsible to conclude without further analysis by CAISO that we could immediately or painlessly phase out these nuclear plants. The responsible course of action would be for CAISO to include a nuclear phase-out scenario in a future iteration of this analysis and vet the results thoroughly with other agencies and stakeholders.

Moreover, the technical ability to serve California’s power demand without our existing nuclear power plants is not the only relevant factor. Another important factor relates to “stranded costs” of these power plants. Nuclear power plants cost billions of dollars to build, which is ultimately paid by ratepayers. Power plants must generally stay online long enough to allow revenue from power sales to pay for the investments. If they are forced offline, and contracts are broken, and “stranded costs” must be paid by ratepayers. No one knows at this time what the stranded costs would be for our existing nuclear plants, but it may be a large amount.

It seems, based on CAISO’s recent analysis, that California may indeed be able to phase out its nuclear power plants without great detriment to the state. But additional study is required, involving not only the ability to serve the electricity needs of Californians but also the stranded costs resulting from such a phase out.

14 Comments

Steven, I don't have time to look up the detailed history of CA nuclear plant expenditures but I urge you to do so. I recall that very large sums were spent not too long ago to replace steam engines and other retrofits, some time after initial construction. So capital costs seem to be an ongoing issue and I won't be surprised at all if additional billions are incurred in the relicensing process (if it succeeds).

ANONYMOUS
December 14, 2011

Tam writes in comment #12: "There are periodic very substantial costs required to keep these plants working and safe. "

The NEI estimates fuel and O&M for a nuclear power plant as costing about $0.021/kWh, which makes electricity from already constructed plants very cheap. The CA reactors are licensed past 2020 and will likely qualify for an extension of 20 years. The financial benefits of keeping these reactors running as long as it is safe seems pretty clear. In the short run, if these reactors are shut down it would expand demand for natural gas generation with considerable costs to ratepayers and damage to the environment. Furthermore, CA is a net importer of electricity and it should be striving to reverse that situation; cutting in-state generation from nuclear power would make progress in that regard almost impossible.

Tam also writes: " If it is the case that these plants will require $billions in additional investments to extend their lives (as is likely), let's look at the potential for investing this money, instead, in renewable sources."

I think the notion that it will take Billions of dollars to qualify for a license extension is extremely unlikely to be true. The original license term of 40 years was not based on the service life of the reactors so there is no reason to believe major renovations will be needed. 48 other nuclear reactors have had their licenses extended already. Did any of these require Billions of dollars in renovation work? I rather doubt it!

Steven, even though PG&E and SCE often talk as though the capital costs are paid off for Diablo and San Onofre this is not really the case. There are periodic very substantial costs required to keep these plants working and safe. Both plants are also seeking relicensing soon, which will surely come with additional very hefty costs. This is why I wrote in my article that 'stranded costs' would have to be analyzed in detail before any decision is made to shut down CA's nuclear power plants. If it is the case that these plants will require $billions in additional investments to extend their lives (as is likely), let's look at the potential for investing this money, instead, in renewable sources. Many renewables can provide baseload power, including geothermal, which currently provides 5% of the state's electricity, as well as biomass, and solar or wind with storage. Storage costs are still uncertain because these are new technologies but it may be the case that storage costs for variable renewables cost less than extending the lives of these nuclear power plants. Let's urge state agencies to examine the issues in detail, as I suggest, and then decide.

ANONYMOUS
December 9, 2011

In comment #7 Warren writes: "Anonymous: Wake up and get the facts! I certainly do know what I am talking about."

Well, he certainly has made no attempt to prove he knows what he is talking about. Ballpark figures, from credible sources, for solar PV are ~ $0.20 /kWh (in favorable locations) and one frequently sees articles here at REW and other places making estimates of when PV will decease to grid parity. Warren claims that his company is already has well below grid parity pricing and has a " selling price to SDG&E averges $0.07/kw-hr over a 24 hour period." and refers to a " solar-hydrogen 24/7 power plant" suggesting that this includes some sort of hydrogen storage scheme. Thus, we are expected to believe that Warren's company has a scheme to yield very cheap solar PV, and can also provide hydrogen storage and the facilities to convert the hydrogen to electricity all for $0.07/kWh so that he can provide base load power. Usually when one makes dramatic claims such as this it is customary to provide some evidence; otherwise he should not expect to be believed. An additional question arises regarding this claim; even if his company could provide the stated technology, why would they sell their electricity for only $0.07/kWh when their nearest competitors are charging MUCH more. Unless you are some sort of Santa Claus, you would normally price your product so that you are the lowest bidder but NOT substantially lower. Perhaps Warren would like to provide evidence to back up his claims....
Steven

In response to warren2, we should be putting real money into geothermal, but talk of canning nuclear should be put behind shutting down all fossil fuel power plants. Nuclear certainly has its problems, but in my mind it does not compare to the problems we are going to have because we cannot wean ourselves from fossil fuels.

Anonymous: Wake up and get the facts! I certainly do know what I am talking about.

Ec0-Engineers Corp., is in Phase I of constructing the world's largest 1000 MWe solar-hydrogen 24/7 power plant for San Diego.
Their selling price to SDG&E averges $0.07/kw-hr over a 24 hour period.

In 1980, a nuclear power plant cost about $1 billion. By the year 2010, the cost had risen to $8 billion with a 10 year permitting and construction timeline. In 2010, a new 1,000 MWE nuclear power plant was proposed for construction in The South Eastern U.S. The total cost was estimated at $8 billion and there were a number of investors involved. Later, the estimate was raised to $10 billion and several of the largest investors dropped out cancelling the project.

The world is going more with SOLAR, Wind and Geothermal Powered Energy. The day of the need for Dirty Oil and dangerous Nuclear Power are coming to a end fast. The Freedom Element Living with Hydrogen That Dr. Addison Bain has showed the world will free most all of the need for the Power Grid and Oil CEO's.

The Lord's Little Helper
Paul Felix Schott

ANONYMOUS
December 8, 2011

Regarding warren2's remarks in comment #4:
The cost of new nuclear power is beside the point because these are already constructed reactors--the major costs are ALREADY paid. As for the claim that solar is "now $0.07" (presumably intended to read $0.07/kWh) perhaps Warren2 would like to provide some evidence for this claim--this is roughly a factor of 3 lower than traditional estimates (for example by the EIA). I'm inclined to believe Warren doesn't know what he is talking about regarding both solar and nuclear power. Certainly, comparing Fukushima to Chernobyl is over the top.
Steven

Tim, Bruce, fsc: I agree. Nuclear power should be banned NOW everywhere ! Germany banned their nuclear plants in 1995. What do they know that we don't ?

Let me put the nail in nuclear power's coffin. As an ex-nuclear research engineer for GE, I know all of nuclear power's "dirty little secrets". The Fukushima disaster is
just one in a long string of accidents in the U.S. and elsewhere. Wait a few year and you will see the cancer rate increase by 300% in the civilians close to the reactor and even downwind as it happened downwind of the Chernobyl accident.
Nuclear is not economical. The rates are $0.15 kw-hr as
determined by the IAEA. Solar is now $0.07.

ANONYMOUS
December 8, 2011

CA's 4 in-state reactors (in the 2 plants mentioned above) produced more than 15% of the electricity generated in state in 2009 (the state is a major importer of electricity, so this is different from 15% of total consumption). Nuclear reactors have high construction expenses and high decommissioning expenses but their running costs are quite low. Thus, the incremental electricity from these reactors is nearly free and it would cost ratepayers greatly to phase them out early. The cost to the environment would also be high because the shortfall in electricity would have to be met mostly by natural gas fired generation or by further imports. At a time when CA is making huge budget cuts and cannot even afford to house all of its prisoners it would seem to be shear folly to contemplate eliminating cheap, safe, and relatively clean nuclear power.
Steven

I couldn't agree more. People tend to overreact to sudden bad events, such as Fukoshima, even when new occurrences of the disaster can be prevented (mostly) and are improbable to happen in any given year. Our nuclear power plants have functioned without harm for decades.
On the other hand, people underreact to slow moving certain catastrophes, such as climate change. More people avoid eating beans because it MAY make you fart today. Less people stop smoking because it will VERY LIKELY kill you tomorrow. Not that farting is good but it is not as bad as dying.
We should phase out coal first, then gas, and last nuclear.

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Tam Hunt is managing member of Community Renewable Solutions LLC, a renewable consulting and project development company focused on community-scale wind and solar. He is also a lecturer at UC Santa Barbara’s Bren School of Environmental...